The BBC and BSkyB have resolved their long-running row over retransmission fees with the corporation no longer having to pay to put its channels on the pay-TV platform, saving £4.5m a year in licence fee money.

They have also agreed a new long-term carriage deal for BBC services and the iPlayer on-demand service on Sky's satellite platform.

ITV will also benefit, saving around £2m a year after reaching an agreement with Sky last month to drop the fee as part of carriage negotiations for its pay-TV drama channel ITV Encore.

In a joint statement, the two broadcasters said: "Sky and the BBC have reached an agreement which reduces the BBC's payments for platform services to zero.

"Alongside this, both parties have reached an agreement that secures the long-term availability of BBC channels and BBC iPlayer on the Sky platform. We will also continue to discuss opportunities that offer Sky customers new and innovative ways to discover and consume BBC content."

The BBC had previously paid £4.5m a year in retransmission fees with the three other public service broadcasters, ITV, Channel 4 and Channel 5, footing a combined bill of around £10m.

The issue was made a priority by the BBC's director of strategy and digital, James Purnell, and BBC director general Tony Hall.

The BBC has previously argued that its content underpinned Sky's profits and the charge should be dropped. Sky had argued that the BBC was benefiting directly from its billions of pounds of investment and technical services supporting its 49 radio and TV channels on the platform.

The BBC's retransmission bill was £10m a year until it was reduced three years ago.

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